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Pension Policies
from 2022 Journal
Pensions & Health Benefits Guidelines
Adopted: 1996/Amended 2017 Board of Pensions of the Dakotas Annual Conference of the United Methodist Church, Inc. Benefit Programs administered by the Dakotas Conference Board of Pensions include: • Health Insurance: The Board currently provides health insurance for eligible active clergy, retired clergy under the age of 65, lay employees, their families and surviving spouses through the “HealthFlex” plan offered by Wespath Benefits and Investments (formerly General Board of Pension and Health Benefits). The Board recommended effective 1/1/2013, providing retirees with access to coverage through Via Benefits which will be facilitated by Wespath Benefits and Investments. This was voted on and approved at Annual Conference June 2012. • Beginning in 2019, we moved to HealthFlex Exchange through Wespath giving active participant’s more coverage options.
The participant’s share calculations will no longer be based on participant’s total compensation. Details were shared throughout 2018. • Comprehensive Protection Plan (CPP): CPP provides several benefits for eligible active clergy, retired clergy, their families and survivors. These include: o Disability benefits for clergy who are not able to perform full-time work as clergy for medical or behavioral health reasons. o Death benefits of lump-sum payments upon the death of a clergy, spouse, surviving spouse, or dependent child, a basic annuity rate for surviving spouses, an annual surviving child benefit for children under the age of 18, and an educational benefit for surviving children enrolled in school and under age 25. According to Wespath Benefits and Investments, “Clergy who retire under the 20 year rule are not eligible for CPP death benefits.” Effective 1/1/2013 for those who retire 1/1/13 or after (CPP) Participant (retiree, retiree’s spouse, retiree’s surviving spouse, retiree’s child) Death Benefits will change to a flat dollar amount rather than a percentage of the Denomination Average Compensation in the year of death as was calculated previously. Death benefits for Active Participant will remain the same. Effective 1/1/2017 the Dakotas Conference will make it mandatory that CPP participation will cover all full time, three quarter time ordained or in process of becoming clergy members, clergy on sabbatical, local pastors and members of other denominations (provided they are not covered under another denomination’s benefits). • The Ministerial Reserve Pension Fund (Pre-1982 – MRPF): This “Defined Benefit” plan offers a benefit for each year of service before 1982. The annuity (Past Service) rate is adjusted according to the CAC (Conference Average Compensation.) • Ministerial Pension Plan (MPP): A defined contribution plan for service between January 1, 1982 and December 31, 2006.
Effective January 1, 2007, no further contributions are paid into this plan. However, the Annual Conference is still responsible to guarantee the annuity amounts paid from the Ministerial Pension Plan. • Clergy Retirement Security Program (CRSP): Approved by the 2012 General Conference, CRSP provides two levels of benefits for clergy effective 1/1/2014: a) a “Defined Benefit” (DB) component equal to 1.00% of the Denominational Average
Compensation (DAC) at retirement for each year of credited service (1.25% of credited service from 2007-2013) and b) a “Defined Contribution” (DC) equal to 2% of a clergy’s plan compensation deposited into an investment account controlled by the clergyperson. In addition, the Church/salary paying unit will match participant contributions to the United Methodist Personal
Investment Plan (UMPIP) up to 1% of compensation – and deposit those matching funds into participant CRSP DC accounts.
Therefore, if a participant contributes at least 1% of compensation plus housing to UMPIP, his or her CRSP DC contributions will be 3% as was under the 2007-2013 CRSP plan. This plan change became effective January 1, 2014. • Pension and Benefit Plans for Lay Employees: The Board of Pensions administers these plans; however, funding and enrollment for these plans are the responsibility of the employer (Annual Conference, UM related institution, or local church). · United Methodist Personal Investment Plan (UMPIP): This voluntary plan is a 403(b) retirement savings and investment plan. If local churches, the annual conference, or UM related institutions are willing to become a plan sponsor, clergy and lay employees can make personal contributions to UMPIP without any “employer” contributions. The requirements to do this are very simple: complete the necessary application forms to be a PLAN SPONSOR, withhold an amount from the employee’s wages, and submit it to Wespath Benefits and Investments monthly on the employee’s behalf. Beginning in January 2018 the Dakotas Conference became Plan Sponsor
for all clergy.
· UMPIP personal contributions: Beginning in January 2018 all clergy with an existing participant contribution election at a contribution rate that is lower than the default contribution rate of 3%, all clergy who are not making participant contributions, and all new clergy hires will be automatically enrolled in the UMPIP plan with a contribution rate of 3%. Participants will have the opportunity to opt-out. This will not affect participants that are already contributing 3% or more.
If clergy want to make sure they continue to receive the full 3% into their CRSP DC account they will need to participate and make personal contribution of a minimum 1% of their compensation plus housing into their UMPIP account.
Health Benefits Guidelines
Conference Health Benefits Plan Eligibility To Participate And Premium Payment Rules For Active Pastor And Lay Employees
ADMINISTRATION OF PENSION AND BENEFIT FUNDS: The Board of Pensions of the Dakotas Annual Conference of the United Methodist Church, Inc. shall be responsible for the administration of the pension and other benefit funds of the Conference in accordance with THE BOOK OF DISCIPLINE of The United Methodist Church. The conference health benefits plan will be provided through HealthFlex, a group plan under the auspices of Wespath Benefits & Investments (formerly General Board of Pension and Health Benefits) of The United Methodist Church. ELIGIBILITY FOR ACTIVE PARTICIPATION IN THE CONFERENCE HEALTH BENEFITS PLAN Beginning January 2022, HealthFlex coverage will include three-quarter time active clergy. All of the same options will be available to these clergy as available to full time clergy. There will be the option for both three-quarter time and full-time clergy to Opt-Out as long as they qualify for the Opt-Out reasons. The Opt-Out reasons are as follows: 1. Enrollment in coverage through former or current employer 2. Enrollment as a dependent in your spouse’s employer-provided coverage 3. Enrollment in Champus/Tricare 4. Enrollment in Medicaid or Medicare 5. Coverage under HealthFlex through your local church (Salary-Paying Unit) through your Plan Sponsor (Annual Conference) is considered unaffordable under the ACA. 6. The participant has no offer of employer-provided coverage under HealthFlex
HealthFlex Direct Bill effective 2022: Full time pastors – churches with covered pastors will be billed the full HealthFlex Direct Bill. Churches with opt-out pastors (full time) will be billed half of the full HealthFlex Direct Bill. Three quarter time pastors – churches with covered pastors will be billed half of the full HealthFlex Direct Bill. Churches with opt-out pastors (3/4 time) will be billed one quarter of the full HealthFlex Direct Bill. Churches with a retired pastor serving immediately following a covered pastor will be billed half of the full HealthFlex Direct Bill.
Clergy appointed full time interim of less than 12 months are eligible to Opt-Out. The appointed church will still be responsible for the HealthFlex Direct Bill.
a. No active United Methodist pastor can participate in the Conference Health Benefits Plan if they are appointed/ employed less than three-quarter time. b. A lay employee of a salary paying unit normally scheduled to work 30 hours or more per week inclusively in a calendar year and who has reached age 18 and who has been employed for at least one month shall be eligible for coverage in HealthFlex. c. Active participants who do not enroll during the initial 30-day eligibility period can enroll only during the annual open enrollment period and the pre-existing conditions provisions of the plan would then take effect. In addition, active participants who experience a special enrollment event may enroll mid-year. d. Participants appointed to medical leave and receiving CPP disability benefits may participate in the Conference
Active Health Plan and will be responsible for paying the participant’s share as long as conference policy and rules permit. The participant’s share for 2016 and forward: 28% of participant’s actual premium, whether single or participant-plus-one or family will be paid to the conference office. e. Participants appointed to medical leave and applying for CPP disability benefits can participate up to four (4) months and will be responsible for the participant’s share as long as conference policy and rules permit. The participant’s share for 2016 and forward: 28% of participant’s actual premium, whether single or participant plus one or family will be paid to the conference office. Applications for extensions of the four (4) month time limit should be made to the Conference Benefits Officer for Executive Committee review and consideration.
f. Participants appointed to sabbatical leave may remain covered on the health plan for up to 12 months. Participants after the 12 months are eligible for the 18-month Continuation Coverage provided by the plan. Participants pay 100% of premium. g. Participants appointed to voluntary leave of absence/personal leave may remain covered on the health plan for up 178
to 12 months. Participants after the 12 months are eligible for the 18-month Continuation Coverage provided by the plan. Participants pay 100% of premium. h. Participants appointed to voluntary leave of absence/transitional leave may remain covered on the health plan for up to 12 months. Participants after the 12 months are eligible for the 18-month Continuation Coverage provided by the plan. Participants pay 100% of premium. i. Participants appointed to voluntary leave of absence/family leave remain covered on the health plan for up to 12 months. Participants after the 12 months are eligible for the 18-month Continuation Coverage provided by the plan. Participants pay 100% of premium. j. Participants granted maternity/paternity leave will remain covered for the duration of the leave. Participant and salary paying unit will continue to pay their respective shares of premium for duration of leave. k. Participants appointed to involuntary leave may remain covered on the health plan for up to 12 months. Participants after the 12 months are eligible for the 18-month Continuation Coverage provided by the plan. Participants pay 100% of premium. l. Grant Policy: "In the event that a Conference health plan participant (clergy, surviving spouse, or lay employee) has a significant financial need related to medical costs, Conference Board of Pensions' grant funding may be available by applying to the Conference Benefits Officer. Participants in sub adoption agreement health plans who have a significant medical financial need may apply to their employer for assistance.” m. When both spouses of a clergy couple are appointed full-time to a local charge, it should be noted that each spouse be covered by a separate policy unless they have a qualifying dependent. In that case, they may be covered by a family policy. Clergy couples covered by a family policy will pay only one participant’s share (calculated on the salary of the spouse with the higher salary). Clergy couples on separate policies will each have a participant’s share. In either case, only one Direct Bill will be billed which may be split between the charges. n. Surviving Spouses and their eligible dependent(s) (up to age 26 or as otherwise permitted under federal or state law) of a deceased active pastor or lay employee may remain eligible for coverage under the active health plan until the surviving spouse reaches age 65. The Surviving Spouse’s cost will be 28% of the actual premium, whether single or 2 party or family and will be paid to the conference office, directly. This policy is retroactively effective commencing January 1, 2021. In the event of remarriage of a surviving spouse, the Surviving Spouse and their dependent(s) shall no longer be eligible for coverage under the active health plan. MONTHLY PAYMENT OF HEALTH BENEFIT PREMIUMS: The Conference Health Benefit Plan premium shall be remitted monthly to the conference Office of Finance and Administrative Services by: a. The church treasurer, who shall pay this amount from the church budget for the direct bill and deduct the appropriate amount from the participant's salary for the participant’s share. b. The Conference Director of Finance and Administrative Services shall deduct the appropriate amount from the participant's salaries paid by the Annual Conference. c. Treasurers of independent agencies enrolled in the conference health plan. d. Individuals who are responsible for payment of part or all of their premiums, but whose premiums are not paid by those listed in a. through c. above.
Conference Health Benefits Plan Eligibility To Participate For Retirees & Survivors (Clergy Or Lay)
ADMINISTRATION OF PENSION AND BENEFIT FUNDS: The Board of Pensions of the Dakotas Annual Conference of the United Methodist Church, Inc. shall be responsible for the administration of the pension and other benefit funds of the Conference in accordance with THE BOOK OF DISCIPLINE of The United Methodist Church. The conference health benefits plan will be provided through HealthFlex Exchange (retirees under 65), a group plan under the auspices of Wespath Benefits & Investments (formerly General Board of Pension and Health Benefits) of The United Methodist Church and Via Benefits (formerly One Exchange) (retirees 65 and older), a Medicare Individual Supplement Insurance Exchange.
Eligibility Rules for Participating in the Conference Health Benefits Plan, HealthFlex Exchange (Retiree under 65)
To participate in this health plan of the Conference in retirement: CLERGY: To be able to participate in the health plan of this Conference in retirement, a person must have been an active clergy member of this Conference for at least five years immediately prior to retirement and a participant in HealthFlex for five (5) continuous uninterrupted years immediately prior to retirement LAY: To be able to participate in the health plan of this Conference in retirement, a person must have been for at least five years immediately prior to retirement either an active lay employee of this Conference or an active lay employee of a Conference-related institution and must be a participant in HealthFlex for five (5) continuous uninterrupted years immediately prior to retirement. 179
SURVIVORS: To be able to participate in the health plan of this Conference as a surviving spouse or surviving dependent, the person survived (the deceased participant) must have been participating in the health insurance plan of this Conference at the time of the participant’s death. Surviving dependent children remain eligible as long as the child remains dependent and is not eligible for health care through government programs. SPOUSES: To be able to participate in the health plan of this Conference as a spouse the person must have been married to the clergy or lay employee prior to retirement and the clergy or lay employee is eligible to participate.
To participate in this health plan of the Conference in retirement: CLERGY: Shall be retiring as a member of the Dakotas Conference AND meet one of the following: a. Have been a member and on HealthFlex for five continuous years immediately prior to retirement; b. Was eligible but declined or dropped retiree HealthFlex coverage with 20+ years of service; c. Have 20+ years of full-time service but retire with less than five continuous years on HealthFlex immediately prior to retirement; d. Have 20+ years of full-time service but retire while serving a charge part-time; e. Have 20+ years of full-time service but retire while on Voluntary Leave of Absence; f. Have 20+ years of full-time service but retire while under appointment of another Conference (346.1); g. Have 20+ years of full-time service but retire while appointed to extension ministry under GBHEM (344.1b); h. Have 20+ years of full-time service but retire while appointed to other extension ministries (344.1b); i. Have 20+ years of full-time service but retire while appointed to extension ministry under GBGM (344.1c); j. Have 20+ years of full-time service but retire while appointed to extension ministry within the Connectional Structure (344.1a); k. Have 20+ years of full-time service but retire while appointed to a church of another denomination (345); l. Have been approved by the Conference Board of Pensions because of exceptional circumstances. LAY: To be able to participate in the health plan of this Conference in retirement, a person must have been for at least five years immediately prior to retirement either an active lay employee of this Conference or an active lay employee of a Conference-related institution and must be a participant in HealthFlex for five (5) continuous uninterrupted years immediately prior to retirement. SURVIVORS: To be able to participate in the health plan of this Conference as a surviving spouse or surviving dependent, the person survived must have been participating in the health insurance plan of this Conference at the time of the participant’s death. Surviving dependent children remain eligible as long as the child remains dependent and is not eligible for health care through government programs. Any retiree not participating in Social Security, i.e., who has opted out of Social Security, and thereby not covered by Medicare Part
A and enrolled in Medicare Part B, will NOT be eligible to participate in the health plan of this Conference, through Health-
Flex, Via Benefits or otherwise, in retirement. This does not prohibit a retiree’s spouse from participating if the spouse has
NOT opted out of Social Security and is covered by Medicare Part A and enrolled in Medicare Part B. Rules and policies included in the adoption agreements between Wespath Benefits & Investments (formerly General Board of
Pension and Health Benefits) of The United Methodist Church and the Dakotas Annual Conference of The United Methodist
Church supersede these policies.
Conference Eligibility For Health Reimbursement Account (HRA) and Premium Support Funding For Retirees & Survivors (Clergy Or Lay) Eligibility Rules for Receiving Funding in a Retiree Health Reimbursement Account (HRA) or through Premium Support
For determining eligibility, the following service qualifies as full-time service: clergy that are appointed in this Conference or within the connectional structure to a unit of this Conference or on CPP (disability) for which the annual conference has provided the pension contributions to either CRSP, MPP, or Pre-82. These changes became effective 1/1/2017. Elders, Associate Members, Provisionals, and Local Pastors: Sabbatical Leave (¶352); Full-time local charge in Conference; Full-time within the Conference; CPP (disability) Any retiree not participating in the health plan of this Conference will NOT be eligible for receiving a retiree HRA or premium support. In addition: a. CLERGY: To be eligible to receive a retiree HRA or premium support, a person must have the following years of fulltime service: i. Persons retiring prior to 1/1/2016 must have 6 or more years of service. ii. Persons retiring from 1/1/2016 to 12/31/2019 must have 10 or more years of service. iii. Persons retiring from 1/1/2020 to 12/31/2023 must have 14 or more years of service. iv. Persons retiring from 1/1/2024 to 12/31/2025 must have 18 or more years of service. v. Persons retiring after 12/31/2025 must have 20 or more years of service.
b. LAY: To be eligible to receive a retiree HRA or premium support, a person must have the following years of fulltime service as determined by their employment record: i. Persons retiring prior to 1/1/2016 must have 6 or more years of service. ii. Persons retiring from 1/1/2016 to 12/31/2019 must have 10 or more years of service. iii. Persons retiring from 1/1/2020 to 12/31/2023 must have 14 or more years of service. iv. Persons retiring from 1/1/2024 to 12/31/2025 must have 18 or more years of service. v. Persons retiring after 12/31/2025 must have 20 or more years of service. c. SURVIVORS, SPOUSES, AND DEPENDENT CHILDREN: Eligibility extends to the surviving spouse or, if no surviving spouse, the surviving dependent children of eligible clergy persons and lay employees at the same rate as the person that they survived. d. Retirees serving in retirement at a church that they have served during active status will not qualify for any fund due to IRS rules. However, once they have fully retired from serving or are serving a church that was not in their active service record will be eligible to receive funding. The funding that they would have earned when they officially retired will then be put into their account as well.
Determining Amount of HRA Contributions and Premium Support
The amount for those persons eligible will be calculated based on: a. The person’s age as of January 1st (calculated to a quarter-year). For dependent children, the age of the clergy person or lay employee will be used. b. The years of full-time service as defined above in the eligibility rules section for clergy persons or the employment records for lay employees. For dependent children and spouses, the years of service of the clergy person or lay employee will be used. For clergy couples, the years of service of the spouse with the greater number of years of service will be used for both persons. c. Years of credit in place as of July 2012 will be grandfathered in to the HRA calculations. An amount determined by the ratio of each participant’s individual calculations (age plus years of service minus the number 65) to the total of all individual calculations. Each participant’s individual ratio will be applied to the total amount available for contributions for the retiree’s HRA and premium support. The total amount available for HRA contributions and premiums support will be determined by the Conference Board of
Pensions as part of their annual budget recommendation. For retirees age 65 and older that are on Via Benefits, their amount will be deposited in an HRA administered through Via
Benefits. For retirees under the age of 65 that are on HealthFlex Exchange, their premium support will reduce the amount of the premium that the retiree is responsible for. (e.g. In 2021, depending on the plan that is selected from the six plans that will be available, the premium will range from $7,500 up to $10,164 for single coverage; $14,256 up to $19,308 for 2 party coverage. The conference support will be based on the same calculations as though they were retired and 65 year or older.
See the prior paragraph for explanation. This does not include any dental or advanced vision coverage that will also be available.
If a retiree is unable to pay the total participant’s share, the retiree may apply to the Conference Board of Pensions by contacting the Conference Benefits Officer for possible grant funding assistance.
Rules and policies included in the HealthFlex Plan Documents and Adoptions Agreements between Wespath Benefits &
Annual Conference of The United Methodist Church supersede these policies. Specific Rules and Policies regarding Medical Reimbursement Accounts (MRA) and Dependent Care Accounts (DCA). If a participant fails to make the required contributions within sixty days of such notice, the plan sponsor may terminate the participant’s coverage effective the end of the month for which some partial contribution has been paid by the participant.
This may apply to a participant’s medical, dental, vision and medical/dependent reimbursement accounts as a group, or to just a medical reimbursement account and/or dependent care account. The plan sponsor needs to complete an enrollment/ change form showing declination of coverage on the participant, with the event date being the last date of the period for which partial payment was received. If participant later wants to accept coverage he/she must wait until the next annual election period to enroll for coverage beginning the following plan year. In addition, in order to re-enroll and select election, all outstanding premiums must be paid by the participant. The exception to this is if the participant or dependent experiences a special enrollment event as defined under the Health Information Protection and Portability Act (HIPPA). 181
Divorced Spouses may continue to participate in HealthFlex for up to two (2) years if divorce decree does not stipulate a time period. Participant or Divorced Spouse pay 100% of the premium, depending on divorce decree stipulations. Surviving spouses of clergy who are participating in the Conference Health Benefits Plan will receive reimbursement of their
Medicare Part B premium. If a surviving spouse remarries, Medicare Part B reimbursement is reduced to 50%. Questions regarding policy interpretation should be addressed to the Conference Benefits Officer, Conference Board of Pensions, for referral to, and decision by, that body. Specific Rules regarding payment of direct billing to churches and participants If payment is not made on the direct billing to the church for both the churches’ direct bill and/or the participant’s direct bill, the following steps will be taken: After 30 days, a certified letter will be sent by the conference finance office to the applicable pastor/participant, church/charge treasurer, PPRC Chair, and applicable district superintendent inquiring about payment. After 45 days, the applicable district superintendent will contact the applicable pastor/participant, church/charge treasurer, and
PPRC Chair to inquire and encourage regarding payment.
Funding Policies RETIREE HEALTH FUNDING PLAN/(HEALTH REIMBURSEMENT ACCOUNTS)
To fund the Health Reimbursement Account contributions, the Board will use funds from three sources. It is the Board of Pensions hope that we will be able to increase the funding amount each year for our retirees: 1. Funds that had been accumulated for the Retiree Health Liability. 2. Earnings from the Frank Lynch and Georgia Lynch Trust. 3. Each year a small percentage will be added to the Active Participant Share in the “Salary Ratio” that the Active Participant Share is currently calculated. The amount generated by the additional 3% in 2018 will be directed to funding retiree health.
Care and Concern Fund: Care and Concern funds are available to the cabinet on a case-by-case basis. The case shall be presented by the Cabinet for approval by the Executive Committee of the Board of Pensions as to the need for these funds. A report shall be given to the full Board of Pensions on any cases. These funds shall be of a last resort after all other options have been explored including the use of cabinet emergency funds. The purpose of this fund is to assist: A) pastors exiting from ministry and B) caring for extreme health and well-being issues. At the end of the calendar year any leftover cabinet emergency funds shall be transferred to replenish the Care and Concern fund.
Lynch Trust Funds Policy
The Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. is the entity within the Dakotas Conference structure that has “charge of the interests and work of providing for and contributing to the support, relief, assistance, and pensioning of clergy and their families, other church workers, and lay employees of the institutions, organizations, and agencies within” the Dakotas Annual Conference, (Book of Discipline, ¶639). The Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. is the successor of the Conference Claimants Fund and therefore is the entity responsible for administering funds today that are dedicated to the same purpose as the “Conference Claimants Fund” of the Methodist Episcopal Church [and the Methodist Church] as outlined in the will of Frank Lynch. As stated in the [will and codicil of Frank and Georgia Lynch], their intention in making their gift to the Conference Claimants Fund was to provide for the benefit and welfare of “worn out preachers.” Therefore, it is the policy of the Dakotas Annual Conference, that when the principals of the Frank Lynch Trust and the Georgia Lynch Trust are distributed, the Dakotas Conference Board of Pension & Health Benefits shall be the Conference entity to receive and exercise stewardship over both the principal and the existing and subsequent earnings of those Trusts. On receipt of the disbursed Trusts’ assets, the Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. shall deposit those assets in its accounts held on its behalf by Wespath Benefits and Investments (formerly General Board of Pension & Health Benefits) of The United Methodist Church. At the time of receipt, the Treasurer of the Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. in consultation with the Board’s Executive Committee shall determine where in the Wespath (formerly General Board) accounts to deposit the assets. Subsequent movement and investment of the assets shall be made in accordance with then-current policies and practices of the Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. On receipt of the assets, the initial principal amount shall be held by the Board of Pensions of the Dakotas Annual Conference
